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IFAs rush to meet offshore account warning rules

Gibraltar Offshore Financial advisers are working to make sure clients are told about new tax evasion rules as part of a fresh crackdown by HM Revenue & Customs.

IFAs must send letters to clients by the end of next week telling them that undeclared offshore accounts could land them in trouble with the taxman.

HMRC’s message, which must be included in the letters, tells clients to “come to us before we come for you”.

The global transparency drive which is providing HMRC with data about more than 100 countries has seen IFAs and other financial institutions to try and segment their client banks to find out who may have offshore accounts and who may not.

Smith and Williamson partner Tina Riches tells the Financial Times: “We have ended up having to send them to almost everybody.”

Part of HMRC’s notification letter

Advisers are having to tell clients to make sure their tax affairs are up to date and warn them of penalties for undeclared assets, but some have expressed worries clients may misinterpret the HMRC warnings as accusations.

Riches says: “One of our concerns was whether it would backfire in the long run. It does smack of us doing HMRC’s work.”

Many IFAs sent the letter out well in advance however.

Compliance services including Banakhall and Simplybiz have also been informing IFA clients of the need to send the letter.

Meanwhile, there is still confusion as to how the Govt will police new rules against those who “profit from enabling abusive arrangements”, including IFAs, which could levy penalties of 100 per cent of the value of the tax avoided.

IFA tax avoidance penalties confusion as Govt draws blank on new rules



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Good grief. What’s all this about now? The Lichtenstein Disclosure agreement goes back to 2009 – so why didn’t advisers act then?

  2. It’s a worrying precedent that an adviser can be fined (quite significantly) for not making their clients aware of the need to stay on the right side of tax disclosure.

    I always though ignorance was no defence against the law and individuals were responsible and accountable for their own tax affairs – this is bordering on implying otherwise.

    Furthermore, how many will slip between cracks (i.e. orphan clients).

    Provider communications are surely the best way to ensure a message is given to holders of a particular account type.

    Hey ho… more work, adminstration and responsibility placed on the adviser, in a world where everyone is focused on costs.

  3. Mrs. Miggins has interest of £6 on her Dublin based Vanguard fund held on the ACME Wrap account so owes £1.20 to HMRC.Is it covered by tax free savings allowance? Probably not.
    Trouble is, ACME Wrap and the other wrap accounts don’t collate this information and it is missing from the consolidated tax voucher.
    Now Mrs.Miggins needs to do a tax return but the information she needs to complete it is nowhere to be found.
    Client to pay say £150 for a tax return to pay £1.20 and the fund managers and wrap folks are in a pickle.
    What the HMRC have foisted on IFAs is a total farce. A waste of time and resources for no return for us, HMRC , the wrap accounts or the fund managers – and certainly not the client. HMRC are a bad joke.

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